The Indian beer industry is going through a difficult phase as rising costs and strict pricing rules put pressure on companies. United Breweries CEO and MD Vivek Gupta said the sector is in “major trouble” due to higher input costs caused by global conflicts, supply disruptions, and limited pricing freedom.
He explained that key expenses such as bottles, raw materials, and aluminium have become significantly costlier. At the same time, a weaker rupee and declining exports have added to the financial strain. According to him, nearly 75% of the beer business is regulated by state governments, leaving companies with little control over pricing.
Gupta has urged the government to step in, warning that without support, growth and innovation in the industry could slow down. He has requested a temporary price increase or relief in excise duties to help offset rising costs, noting that a large portion of beer prices already goes to taxes.
→ Bira 91 Revival Plan Anicut-Led Board Offers to Buy Out Key Investors→ AB InBev Plans Smaller Packs, Protein Beers and Non-Beer Drinks to Adapt to Changing Consumer Preferences
The industry is also facing a shortage of cans due to rising aluminium prices and supply constraints. Even though steps have been taken to ease imports, the issue is expected to continue in the near term.
Gupta estimated that the ongoing global situation has increased production costs by at least 15%, and the impact could last several months even if conditions improve.
He also pointed out a shift in consumer behaviour. Due to financial pressure, many people are moving towards cheaper beer options and smaller pack sizes. While overall beer consumption has grown modestly in recent years, increasing costs and regulatory challenges remain the biggest concerns for the industry.
About the Author
